The National Board of Revenue (NBR) has launched a nationwide drive to strengthen monitoring and verification of taxes deducted at source, warning that tax officials are empowered under the Income Tax Act, 2023 to inspect business premises, examine records and seize documents where necessary.
In a press statement issued on Saturday, the revenue authority said special teams from tax zones across the country have intensified enforcement activities under the directives of the NBR to ensure proper compliance with withholding tax provisions.
The board urged businesses and withholding entities to remain aware of the powers vested in tax officials under Section 147 of the Income Tax Act, 2023.
Under the provision, tax officials are authorised to enter and inspect the premises of any commercial or economic establishment, examine books of accounts, vouchers, bank statements, receipts and other financial records related to business activities.
Officials may also inspect information stored in computer systems, cloud servers, electronic devices and other digital records. Where required under the law, they may access encrypted or password-protected information during inspections.
The law further empowers officials to temporarily seize books of accounts, documents, electronic records or devices to verify the authenticity of taxes deducted at source. They may also collect copies of documents, images and account records and place official identification marks or seals on them.
The NBR warned that obstructing or refusing to cooperate with authorised officials during such inspections is punishable with fines under Section 147(2) of the Income Tax Act.
The revenue authority requested taxpayers to deposit taxes deducted at source into the government treasury through the e-Challan system, ensuring that the correct legal provision and the appropriate economic code are mentioned.
To address complaints relating to the application of Section 147, including ambiguity, harassment or disputes, the NBR advised taxpayers to contact the member secretary of its Section 147 committee via email at assistance147nbr@gmail.com.
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